Turnover from real estate investment and developer, First Mutual Properties Limited for the first quarter through March 2021 increased by 411% over the same period of the previous year to reach $ 90,172 million ZWL, due to the revision of rents, the increase in rental turnover and the level of occupancy.
The real estate market continued to experience weak demand for space, with the CBD office sector being the hardest hit, while the commercial and industrial segments of the market remained resilient with stable demand.
Net property income grew at a slower pace of 331% during the period due to reinvestment in repairs and maintenance, to improve the quality of the space and speed up rental efforts, the company said. company in its latest commercial update.
Occupancy levels rose 2 percentage points to 89% from levels in the same period a year earlier, “mainly due to net rentals in the CBD office and retail sector”, said First Mutual.
A total of ZWL 7.037 million was spent in the quarter on property maintenance, while the company remained focused on accelerating digital strategies and retaining talent.
Investment property as of March 31, 2021 was valued at ZWL 9.663 billion following a directors assessment, an increase of 3% compared to December 31, 2020.
The lockdown earlier this year delayed rent review efforts, hampered collections and planned maintenance initiatives.
“Collections deteriorated over the period at 57% (December 2020: 78%) as tenants were affected by blocking income generation to meet their obligations,” the company said.
Going forward, the company expects rental yields to remain low due to the slow discovery of rental prices, coupled with a limited increase in rentals due to the oversupply of space, while that recent property revaluations will put pressure on any growth in yields.
The Group finalized a contract for the implementation of a solar energy project at First Mutual Park during the quarter, with the start of material supply, with delivery scheduled for the second quarter of 2021.
The solar system is expected to be operational in the third quarter of 2021.